This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
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INDICES AUSTRALASIA ASX – 5465 ( +4 or +0.07% ) The ASX finished off the week where it started and so our levels this week remain unchanged. We have a relatively quiet calendar in Australia this coming week so will look to what sentiment comes out, however China re-opens this week and will be discussing this in more detail in the LIVE CHAT ROOM . VOLATILITY ALERT: NAB Business Confidence on Tuesday, RBA Financial Stability Review on Friday . For a continued move to the upside we would like to see this market hold above 5437. If this were to happen, we could see a move into 5504 and 5521. A strong break above these levels could see a move to retest the all important 5550 level, and if momentum remains very strong we could see the ASX rally to 5664 by the end of the week. If we fail to hold above 5437, we will look for a move back down to 5373. A break below this could result in a move back into 5294, and further breaks to the downside could see the ASX head to 5238. If we see a complete reversal to the downside, we will watch 5161 as a potential area of support. EUROPE DAX – 10481 ( -44 or -0.42% ) The DAX continues to be range bound. The $12bn fine handed to Deutsche Bank from the DoJ has yet to be negotiated and we expect an outcome very soon . Could we see a deal this week? VOLATILITY ALERT: German ZEW Economic Sentiment. For a continued move to the upside we would like to see the DAX close above above 10585, followed by a break above 10749. Should this occur, we may see another push higher into 10863. Further breaks of this level could see the DAX rally 10983 and 11060 before a pause. If we fail to close above 10585, we will look for a move back down to 10475 and should there be further downside, we could see a move lower to 10382. Should momentum remain very strong, we will look for a further move down into 10158. US SP500 – 2152 ( -14 or -0.65% ) A slightly weaker than expected NFP number last Friday saw the S&P lower into the week’s end however we are still in a very tight range, and expect this to change soon! We will also be discussing this market again in more depth in the LIVE CHAT ROOM this week. VOLATILITY ALERT: FOMC Minutes on Wednesday, Retail Sales, PPI, UoM Consumer Sentiment and Yellen speaks on Friday. NOTE: Monday is a public holiday in the US due to Columbus Day. For a move higher we must now see the S&P break and close above 2160. A strong break and close above this level should see this market head to 2176. Should this occur we will look for a move back up into the all-time highs at 2194. If this market breaks and closes above 2194, we cannot rule out a move to 2212 by the end of the week. If we cannot close above 2160, we will watch for this market to hold 2150. A break below 2150 may see this market retest the previous all-time highs at 2137. A strong break through 2137 could result in a fast move back down to 2126. FOREX AUD/USD – 0.7586 ( -72 or -0.94% ) The Aussie dollar drifted lower all week and found key support last week at one of our key levels. VOLATILITY ALERT: NAB Business Confidence on Tuesday, RBA Financial Stability Review on Friday . For a move higher we would like to see the AUD close above 0.7617, followed by a strong break and close above the 0.7662 – 0.7683 region. A strong break and close above these levels could then see a quick move to 0.7729 before a pause; and if momentum remains strong we will look for strong move into 0.7789. If we cannot close above 0.7617, we will look for a move back down to 0.7561. A strong break below this level may result in a move back down into 0.7447, and further breaks lower could see 0.7364 before another potential pause. If momentum remains strong, a break and close below 0.7364 could see a sharp move down to 0.7282. EUR/USD – 1.1200 ( -42 or -0.37% ) Friday saw a complete reversal to the upside in the EURO, closing 1 point below our 1.1201 level, as we prepare for the next major move. Will this be a leg up or down?? We will also be discussing this market in the MEMBER PORTAL this week. VOLATILITY ALERT: German ZEW Economic Sentiment. For a sustained move higher we would now like to see the EURO break strongly above 1.1248. If we can continue to break higher we will look for a quick move into 1.1347. Should momentum remain strong to the upside, we cannot rule out a move back up to 1.1380 this week. If the EURO cannot close above 1.1248, we will watch for a move back down to 1.1201. A break below this level could see this market trade quickly down to 1.1117. Should we see further breaks to the downside, a move to 1.1083 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.1033. GBP/USD – 1.2419 ( -558 or -4.3% ) What is there to say about the GBP/USD other than we told you so! We covered this in our chat room as it happened LIVE. Last week we noted the GBP has not seen these levels for a long time and showed members last Wednesday the 5th why 1.1880 on the downside could not be ruled out. For a a move to the upside we would like to see a strong break and close above 1.2480, followed by a retest of 1.2622. Should this occurr 1.2720 becomes very possible. On the downside we have a key level of 1.2297 and other levels (for clients only) but until we see stability in this market we will refrain from providing further downside targets. We will be providing special coverage of this market in great detail this week in our MEMBER PORTAL . USD/JPY – 102.94 ( +163 or +1.61% ) The $/JPY finally broke to the upside last week as we had alerted to in our Member Portal. On Friday we marginally pierced through the key 104 level before immediately reversing following the NFP number. VOLATILITY ALERT: Current Account on Tuesday.
For a continued move to the upside we would like to see this market break above 103.21. Should this occur we will look for move to retest 103.99. A strong break above 103.99 could then see a move to 104.97, and if momentum remains strong we cannot rule out a sharp move higher to 106.30.
If however the USD/JPY cannot break strongly above 103.21, we will look for a move back down to 102.29. A strong break below this level may see the $/JPY fade all the way back down to 100.61 before a pause. A strong break below these levels could see the USD/JPY trade quickly down to 99.90, and if we continue to trade lower a move down to 98.22 is possible. COMMODITIES GOLD – 1258 ( -60 or -4.56% ) Gold broke some very key levels last Tuesday and continued to follow through to the downside, right down to our key 1247 level . We now wait to see whether this market will settle, or will we see further selling occur? We will discuss this market in more detail throughout the week in our MEMBER PORTAL . For a continued move higher we would like to see GOLD break and close back above 1258, followed by an immediate retest of 1276. A strong break and close above 1276 could see this market head higher to 1294 and 1303 before the end of the week. If Gold cannot break and close above 1258, we will look to see this market hold above 1247. However a break below this level may result in more downside for Gold- with the potential for a fast move down to 1222. Should momentum remain strong, we will watch for a move to 1210 before a pause.
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